Multi-State Cooperative Societies (Amendment) Bill, 2022 gets Cabinet approval

14 Oct,22 9:59 am
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Multi-State Cooperative Societies (Amendment) Bill, 2022: The union cabinet recently approved the multi-state cooperative societies (amendment) act on October 12, 2022.

Key Points:

  • It seeks to amend the Multi-State Cooperative Societies Act, 2002.
  • The decision was made to improve governance, reform electoral process, strengthen monitoring mechanism, improve composition of Board, and also enhance transparency and accountability in the Multi-State Cooperative Societies.
  • The bill will incorporate the provisions of the 97th Constitutional Amendment.
  • The action was taken to make the democratic, transparent, and accountable governance of multi-State cooperative societies.

Key Provisions in the Bill:

  • It has the provision to set up a cooperative election authority, an information officer and an ombudsman.
  • The election authority will ensure that elections are held in a free, fair, and timely manner.
  • This in turn will help in decreasing incidents of malpractice and complaints.
  • The provision to preclude electrical offenders for three years will promote more electoral discipline.
  • Cooperative Information Officer will encourage transparency by providing members with timely access to information.
  • Cooperative Ombudsman will enable a mechanism for the redressal of member grievances in an organized manner.
  • Provisions relating to representation of women and Scheduled Caste (SC) and Scheduled Tribe (ST) members in the board of co-operative societies have been included to facilitate inclusiveness.
  • Provisions have been included for appointing Co-opted directors with experience in the field of banking, management, cooperative management and finance to promote professional management.
  • A provision for the applicant to get an additional two-month time for rectification of errors have also been introduced in the amendments to increase the ease of doing business by decreasing the period of registration.
  • It also provides for electronic submission and issuance of documents thus giving a comprehensive digital ecosystem for multi-state co-operative societies.
  • Along with approving the raising of funds in multi-state cooperative societies, the Bill also aims to improve the board's composition and maintain financial discipline.

Background:

  • Former Agriculture Minister Sharad Pawar introduced the Multi-State Cooperatives (Amendment) Bill, 2010 in the Lok Sabha on November 15, 2010.
  • Under the law the Central Government can appoint a Central Registrar of Cooperative Societies.

What is a cooperative society?

  • A Cooperative Society can be defined as a voluntary association of individuals united voluntarily to meet their common economic, social, and cultural Interests.
  • Its objective is to serve the interest of society through the principle of self-help and mutual help.

Multi-State Cooperative Societies in India:

  • The Multi-State Co-operative Societies Act, 2002 was enacted with a view to facilitating democratic functioning and autonomous working of multi-state co-operative societies in line with the established co-operative principles.
  • India has more than 1,500 multi-state co-operative societies working as an essential tool to promote the economic and social betterment of their members based on the principles of self-help and mutual aid.
  • There are many societies whose members and areas of operation are spread across more than one state.
  • For example, most sugar mills along the districts on the Karnataka-Maharashtra border procure cane from both states.
  • These are known as multi-state cooperative society.

Cooperative Societies in India.

As per the Govt data, there are about 8,55,000 cooperative societies in India. These include some big names like IFFCO, Kribhco and Nafed.

  • Of this, 1,77,000 are credit societies, 700,000 are cooperative societies, 17 national level cooperative unions, and 33 state cooperative banks.
  • There are more than 63,000 active Primary Agricultural Credit Society (PACS) with more than 12 crore members.
  • Around 91% of the villages have cooperatives.

Key Info:

  • The roots of cooperative Societies in India were sown when the first Cooperative Societies Act was passed in 1904.
  • The Government Passed the Co-operative Societies Act of 1912.
  • The National Development Council (NDC) recommended a national policy on cooperatives and the setting up of Cooperative Marketing Societies in 1958.
  • National Cooperative Development Corporation (NCDC) was set up under the National Cooperative Development Corporation Act, of 1962.
  • Union Government announced a National Policy on Cooperatives in 2002.
  • The 97th Constitutional Amendment Act of 2011 granted constitutional status and protection to cooperative societies.

97th Constitutional Amendment Act 2011:

  • It established the right to form cooperative societies as a fundamental right (Article 19).
  • It included a new Directive Principle of State Policy on the Promotion of Cooperative Societies (Article 43-B).
  • It added a new Part IX-B to the Constitution titled "The Co-operative Societies" (Articles 243-ZH to 243-ZT).
  • It authorizes the Parliament to establish relevant laws in the case of multi-state cooperative societies (MSCS) and state legislatures in the case of other cooperative societies.

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